Service tax & vat
Shashank Paradkar
(Querist) 13 October 2012
This query is : Resolved
hi,
is Service Tax & VAT payable on purchase of resale flat.....?
This cost is to be borne by whom.... i.e the seller or the buyer.
What is the % of cost to be paid.
Kindly let me know.
Regards
Shashank
Sivadas Chettur
(Expert) 14 October 2012
Service tax is not attracted on mere sale of immovable property and for that very reason Vat is also not attracted as the Vat levy gets triggered only when there is a transfer of movables.
Ms.Nirmala P.Rao
(Expert) 15 October 2012
Dear Client,
Service Tax and VAT has to be paid by the original buyer when the flat is under construction stage to the builder. Please check the sale agreement and see if it has any clause regarding these taxes payable by you. Please go through my below given explanatory answer also.
1. The service tax and vat has to be paid by the buyer who purchased an under construction property as the builder is providing him services of construction.
2. The threshold of determining whether the flat is underconstruction or not is the Occupation Certficate...if the building has got an OC, the ST and VAT are no longer applicable.
3. Both ST and VAT are indirect taxes and the ultimate burden has to be borne by the end user...ie: Flat buyer. The builder, society cannot pay the ST
4. These taxes are applicable only once during the lifetime of the property (ie: First sale to the buyer at the underconstruction stage) and not applicable on subsequent sale after construction. I don't tjhi9nk you need to pay any ST or Vat at this resale stage.
Ms.Nirmala P.Rao
Legal Expert
